Santander reportedly weighs £2bn bid for Clydesdale and Yorkshire

Spanish banking giant Santander is reportedly considering a £2bn takeover bid
for Clydesdale and Yorkshire banks to accelerate its expansion in Britain.

Santander did not in fact owe the reader any money

By Ben Harrington

6:12PM GMT 20 Jan 2013

Executives in London and Madrid have apparently been looking at the move since the collapse of talks to buy a network of 316 branches from Royal Bank of Scotland last October.

Santander UK, the British arm of the Spanish financial group, is Britain's fifth-biggest bank. It now has 25m customers after taking over Abbey, Alliance & Leicester, and Bradford & Bingley.

The RBS deal would given Santander a meaningful foothold in business banking for the first time.

An acquisition of Clydesdale and Yorkshire would also bolster the Spanish bank's position in small business banking, as both British lenders have prominent positions in small business banking.

The future of Clydesdale and Yorkshire have also been thrown into doubt by their owner, National Australia Bank (NAB). NAB is under pressure from its own shareholders to dispose of the lenders because they generate low returns.

Last year, NAB carried out a strategic review of Clydesdale and Yorkshire, which resulted in the Australian bank cutting 1,400 jobs at the British banks and both lenders quitting the commercial property lending market.

NAB's UK business recorded a cash loss of £25m for the six months to the end of March 2012, down from £77m profit in the same period in 2011, as the charge for bad and doubtful debts rose to £282m.

A spokesman for Santander declined to comment on whether the company is considering an offer for Clydesdale and Yorkshire banks and would only say the lender's "focus is organic growth".